Archives For Maryland

Michelle Sylethia Jordan, a/k/a Michelle Harris and Michelle Welsh, 49; and her husband, Michael Paul Anthony Welsh, a/k/a Michael A. Welsh and Michael Paul S. Welsh, 45, both of Laurel, Maryland, were sentenced yesterday to 57 months and 46 months in federal prison, respectively, each followed by three years of supervise release, on conspiracy and wire fraud charges in connection with a foreclosure prevention fraud scheme.

According to the evidence presented at their eight-day trial, Jordan was chief executive officer and director of MJ Loan Auditor Group, LLC (MJLAG), a limited liability company registered and doing business in Maryland.  Welsh was president and chief executive officer of MJLAG.  Jackson was the owner and manager of CJ Maxx Group LLC, a limited liability company doing business in Maryland, Virginia, and Georgia.

Trial evidence proved that from August 2012 until February 2017, Jordan and Welsh falsely told victim homeowners that, for a fee, MJLAG could help these homeowners modify their mortgage loans and prevent foreclosure of their homes.  Jordan and Welsh falsely represented that MJLAG could help the homeowners get “free and clear” title to their homes, with no debt or liens against the property, and that MJLAG could obtain money from the homeowners’ lenders, typically by suing the lenders.  Jordan and Welsh told homeowners that they needed to purchase one or more “audits” of the homeowners’ mortgage loans in order to uncover fraud and alleged illegal acts committed by the lenders, and that these “audits” could be used as evidence in lawsuits against the lenders and in negotiating for a loan modification.

Witnesses testified that as part of the scheme, Jordan and Welsh had homeowners sign a “contract fee agreement” setting out what fees would be charged for the “audit.”  The contract fee agreement contained the seal of the National Association of Mortgage Underwriters (NAMU), even though the defendants and their companies had no current affiliation with NAMU.  Jordan advised clients to submit baseless complaints about their lender to state and federal agencies, file frivolous lawsuits in local courts, and to stop paying their mortgages.  Jordan further advised MJLAG clients whose homes already were in foreclosure proceedings to file for bankruptcy in order to delay the foreclosure proceedings and as part of the process to prevent foreclosure of the clients’ homes.  Jordan assisted MJLAG clients in filing for bankruptcy, by preparing bankruptcy petitions and related documents and court filings.

The evidence proved that Jordan and Welsh paid Jackson to prepare fraudulent documents purporting to be “Forensic Audit Reports” and “Real Estate Securitization Audits” relating to loans for properties owned by MJLAG clients.  The victim homeowners paid money to MJLAG with the expectation of receiving assistance with modifying their mortgage loans and preventing foreclosure of their homes.

U.S. District Judge Roger W. Titus sentenced co-conspirator, Carrol Antonio Jackson, a/k/a Jack Jackson, 48, of Hinesville, Georgia, to time served, followed by nine months of home detention as part of three years of supervised release.  Finally, Judge Titus ordered that each defendant pay restitution of $491,036.87.  A federal jury convicted the three co-conspirators on June 20, 2018.  http://www.mortgagefraudblog.com/?s=jordan After the verdict was announced, Judge Titus ordered that Jordan and Welsh be detained pending sentencing and they were immediately taken into custody.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Postal Inspector in Charge Peter Rendina of the U.S. Postal Inspection Service – Washington Division; Chief Henry P. Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Sheriff Steve Sikes of the Liberty County, Georgia, Sheriff’s Office; and Vernon M. Keenan, Director of the Georgia Bureau of Investigation.

United States Attorney Robert K. Hur commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, Liberty County Sheriff’s Office SWAT Team, and the Georgia Bureau of Investigation for their work in the investigation, and recognized the Maryland Department of Labor, Licensing, and Regulations for its assistance.  Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, and Special Assistant United States Attorney Elizabeth Boison, who prosecuted the case.

Michelle Sylethia Jordan, a/k/a Michelle Harris and Michelle Welsh, 49; her husband, Michael Paul Anthony Welsh, a/k/a Michael A. Welsh and Michael Paul S. Welsh, 45, both of Laurel, Maryland; and Carrol Antonio Jackson, a/k/a Jack Jackson, 48, Hinesville, Georgia, were convicted on June 20, 2018 of conspiracy and mail and wire fraud charges in connection with a foreclosure prevention fraud scheme.

According to the evidence presented at the eight-day trial, Jordan was chief executive officer and director of MJ Loan Auditor Group, LLC (MJLAG), a limited liability company registered and doing business in Maryland.  Welsh was the president, vice president, and director of MJLAG.  Jackson was the owner and manager of CJ Maxx Group LLC, a limited liability company doing business in Maryland, Virginia, and Georgia.

The evidence showed that from August 2012 until February 2017, Jordan and Welsh falsely told victim homeowners that, for a fee, MJLAG could help these homeowners modify their mortgage loans and prevent foreclosure of their homes.  Jordan and Welsh falsely represented that MJLAG could help the homeowners get “free and clear” title to their homes, with no debt or liens against the property, and that MJLAG could obtain money from the homeowners’ lenders, typically by suing the lenders.  Jordan and Welsh told homeowners that they needed to purchase one or more “audits” of the homeowners’ mortgage loans in order to uncover fraud and alleged illegal acts committed by the lenders, and that these “audits” could be used as evidence in lawsuits against the lenders and in negotiating for a loan modification.

Witnesses testified that as part of the scheme, Jordan and Welsh had homeowners sign a “contract fee agreement” setting out what fees would be charged for the “audit.”  The contract fee agreement contained the seal of the National Association of Mortgage Underwriters (NAMU), even though the defendants and their companies had no current affiliation with NAMU.  Jordan advised clients to submit baseless complaints about their lender to state and federal agencies, and to stop paying their mortgages.  Jordan further advised MJLAG clients whose homes already were in foreclosure proceedings to file for bankruptcy in order to delay the foreclosure proceedings and as part of the process to prevent foreclosure of the clients’ homes.  Jordan assisted MJLAG clients in filing for bankruptcy, by preparing bankruptcy petitions and related documents and court filings.

The evidence proved that Jordan and Welsh paid Jackson to prepare fraudulent documents purporting to be “Forensic Audit Reports” and “Real Estate Securitization Audits” relating to loans for properties owned by MJLAG clients.  The victim homeowners paid money to MJLAG with the expectation of receiving assistance with modifying their mortgage loans and preventing foreclosure of their homes.

The defendants each face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and 20 years in prison for each of ten counts of wire fraud.  U.S. District Judge Roger W. Titus has scheduled sentencing for September 28, 2018 at 9:00 a.m.

After the verdict was announced, U.S. District Judge Roger W. Titus ordered that Jordan and Welsh be detained pending sentencing and they were immediately taken into custody.

The conviction was announced by United States Attorney for the District of Maryland Robert K. Hur; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service – Washington Division; Chief Henry P. Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Sheriff Steve Sikes of the Liberty County, Georgia, Sheriff’s Office; and Vernon M. Keenan, Director of the Georgia Bureau of Investigation.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes.  This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets.  Information about mortgage fraud prosecutions is available http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.

United States Attorney Robert K. Hur commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, Liberty County Sheriff’s Office SWAT Team, and the Georgia Bureau of Investigation for their work in the investigation, and recognized the Maryland Department of Labor, Licensing, and Regulations for its assistance.  Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, and Special Assistant United States Attorney Elizabeth Boison, who are prosecuting the case.

 

Nationstar Mortgage LLC has entered into settlement agreements with the Consumer Protection Division and the Commissioner of Financial Regulation to resolve allegations that it charged homeowners illegal inspection fees.

Nationstar, the nation’s largest non-bank servicer of home mortgages, arranges for property inspections in order to protect the interests of mortgage lenders when homeowners are in default on their payments. Although Maryland law prohibits passing the cost of these inspections onto homeowners, Nationstar allegedly charged the inspection costs to homeowners until January 1, 2014 for forward loans and February 2016 for reverse mortgages. Nationstar assessed Maryland homeowners over $1 million in inspection fees.

Maryland Attorney General Brian E. Frosh made the announcement today.

These inspection charges violate state law,” said Attorney General Frosh. “They were performed for the benefit of the lenders, not the benefit of the homeowners. We are pleased that the victims of the illegal charges will be made whole.”

Under the terms of the settlement, Nationstar agrees to:

  • not collect inspection fees in the future,
  • return over $260,000 in fees in addition to $827,759 that it returned during the Division’s investigation, and
  • pay the Division close to $490,000 in penalties and $10,000 in costs.

The Commissioner of Financial Regulation, who licenses Nationstar, has entered into a Memorandum of Understanding contemporaneously with the Consumer Protection Division’s settlement.

Ana Maritza Gomez, 45, Hyattsville, Maryland, was sentenced to 30 months in prison followed by 3 years of supervised release for conspiracy to commit mail and wire fraud arising from a scheme to defraud victims through a foreclosure rescue scam.  United States District Judge Roger W. Titus also ordered Gomez to pay $205,280.25 in restitution.

Two co-defendants, Rene De Jesus De Leon, 49, Silver Spring, Maryland, and Pedrina Rodriguez Bonilla, 39, Silver Spring, Maryland, have also pleaded guilty to conspiracy to commit mail and wire fraud for their involvement in the same scheme.

According to evidence presented at the six-day trial, from at least late 2011 to August 2015, Gomez and her co-conspirators claimed that they could help homeowners who wanted to modify their mortgage loans and prevent foreclosure of their homes. The conspirators sold the victims on a “principal reduction” program that included an upfront fee, typically between $3,000 and monthly payments for 10 to 15 years. Gomez and her co-conspirators told the victims to make monthly payments to the conspirators and to companies they controlled, in lieu of to the homeowners’ lenders. The companies controlled by Gomez’s co-conspirators were named Marketing Multiservices LLC and Innovative Solutions Services LLC.

According to the indictment and court documents, the conspirators mailed monthly invoices to the homeowner victims that falsely indicated that the “principal balance” was being paid down. Some of the victims paid Gomez in person each month at her residence; or some of the victims deposited their payments directly into bank accounts controlled by Gomez’s co-conspirators. The conspirators told the victims not to open any mail from their lenders and instead provide it to the conspirators. The conspirators did not, however, negotiate with lenders of behalf of the homeowners. Many of the victims lost their homes.

Sentencing for Rene De Leon is scheduled for December 14, 2017 at 10 a.m. and Pedrina Bonilla is scheduled for sentencing on December 13, 2017 at 9:00 a.m.

The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning, Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Chief Henry P. Stawinski III of the Prince George’s County Police Department; Postal Inspector in Charge Robert B. Wemyss of the U.S. Postal Inspection Service – Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.

 

Acting United States Attorney Stephen M. Schenning commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, and the Prince George’s County State’s Attorney’s Office for their work in the investigation.  Mr. Schenning thanked Assistant United States Attorney Kristi N. O’Malley and Special Assistant United States Attorney Jolie F. Zimmerman, who prosecuted the case.

David Harris Lavine, 58, Rockville, Maryland, was indicted by a grand jury on charges of theft of bank funds by a bank officer and bank fraud and Lavine and Charles L. Tobias, 56, Potomac, Maryland were indicted for conspiracy to defraud the Internal Revenue Service and tax evasion.

From March 2010 until January 2011, Lavine was the Acting President of CFG Community Bank.  From January 2011 until August 2011, Lavine was president of the bank affiliate, Capital Financial Ventures, LLC. According to the indictment, Lavine, while acting President, diverted $100,000 of bank funds to his own benefit.  The indictment also charges that while president of the bank affiliate, Lavine devised a scheme to defraud CFG Community Bank, a state member bank supervised by the Federal Reserve Board, through the re-finance of bank-owned mortgage loans and the diversion of loan proceeds to his personal benefit and the benefit of a friend.

According to court documents, Lavine used his position at Capital Financial Ventures to pose as the CEO/President of CFG Community Bank. For example, Lavine invited the borrowers of two loans with balances totaling over $7.5 million, to refinance those loans with other financial institutions for a lower mortgage and pay off CFG Community Bank.  At Lavine’s direction, the settlement company sent the mortgage loan payoff not to CFG Community Bank but to another company so that Lavine could divert in excess of $775,000.   Lavine created false correspondence with the loan borrowers to provide to CFG Community Bank to conceal the diversion from CFG Community Bank.

According to the indictment, Lavine and Tobias owned Capital T Partners Brookfield, LLC, a Maryland limited liability corporation. In the fall 2011, Lavine and Tobias decided to realize a profit from a group of non-performing mortgages by fraudulently “donating” some of the mortgages to a charity as an in-kind donation and thereby receiving a valuable tax deduction for Capital T Partners Brookfield which would pass through to their personal income tax returns.  Lavine is also charged with tax evasion for two years for failing to report the monies he received through the bank offenses and using the fraudulent charitable contribution as a deduction.  Tobias is charged with tax evasion for failing to report income and also using the fraudulent charitable deduction.

The maximum possible penalties for the bank offenses are thirty years in prison and/or a $1 million fine per count and 5 years in prison and /or $250,000 per count for the tax charges.

The indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Kimberly Lappin of the Internal Revenue Service-Criminal Investigation; Assistant Inspector General Gerald Maye of the Federal Reserve Board Office of Inspector General and Special Agent in Charge Michael McGill of the Social Security Administration, Office of Inspector General.

Acting United States Attorney Stephen M. Schenning commended the IRS, FBI, the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau and SSA-IG for their work in the investigation.  Mr. Schenning thanked Assistant United States Attorney Joyce K. McDonald who is prosecuting the case.

Ana Maritza Gomez, 44, Hyattsville, Maryland, was convicted by a federal jury of one count of conspiracy to commit mail and wire fraud and five counts of mail fraud arising from a scheme to defraud victims through a foreclosure rescue fraud scam.

Two co-defendants, Rene De Jesus De Leon, 48, Silver Spring, Maryland, and Pedrina Rodriguez Bonilla, 38, Silver Spring, Maryland, have also pleaded guilty to conspiracy to commit mail and wire fraud for their involvement in the same scheme.

According to evidence presented at the six-day trial, from at least late 2011 to August 2015, Gomez and her co-conspirators claimed that they could help homeowners who wanted to modify their mortgage loans and prevent foreclosure of their homes. The conspirators sold the victims on a “principal reduction” program that included an upfront fee, typically between $3,000 and monthly payments for 10 to 15 years. Gomez and her co-conspirators told the victims to make monthly payments to the conspirators and to companies they controlled, in lieu of to the homeowners’ lenders, as part of the conspirators program. The companies controlled by Gomez’s co-conspirators were named Marketing Multiservices LLC and Innovative Solutions Services LLC.

According to the indictment and court documents, the conspirators mailed monthly invoices to the homeowner victims that falsely indicated that the “principal balance” was being paid down. Some of the victims paid Gomez in person each month at her residence; or some of the victims deposited their payments directly into bank accounts controlled by Gomez’s co-conspirators. The conspirators told the victims not to open any mail from their lenders and instead provide it to the conspirators. The conspirators did not, however, negotiate with lenders of behalf of the homeowners. Many of the victims lost their homes.

Sentencing for Ana Maritza Gomez is scheduled for October 12, 2017 , at 10:00 a.m. Sentencing for Rene De Leon is scheduled for September 7, 2017, at 1:00 p.m., and Pedrina Bonilla is scheduled for sentencing on September 7, 2017, at 10:00 a.m.

Each defendant faces a maximum sentence of 20 years in prison, 3 years of supervised release, and a $250,000 fine for each count.

The conviction was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning, Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Chief Henry P. Stawinski of the Prince George’s County Police Department; Postal Inspector in Charge Robert B. Wemyss of the U.S. Postal Inspection Service – Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.

Acting United States Attorney Stephen M. Schenning commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, U.S. Postal Inspection Service and the Prince George’s County State’s Attorney’s Office for their work in the investigation. Mr. Schenning thanked Assistant United States Attorney Kristi N. O’Malley and Special Assistant United States Attorney Jolie F. Zimmerman, who are prosecuted the case.

Benjamin Bland, 41,  Richmond, Virginia, was convicted by a federal jury of conspiracy to commit wire fraud, wire fraud, and social security fraud.

According to evidence presented at his five day trial, Bland was the owner and registered agent of a company headquartered in Richmond, Virginia that hosted a website that purported to provide individuals with a legal means to start a new credit file through the issuance of a “secondary credit number.” Bland falsely told his customers that these “secondary credit numbers” were “100% legal” and issued “by lawyers.” However, Bland had invented the term “secondary credit number,” there were no lawyers involved with his business, and the “secondary credit numbers” were actually social security numbers that had been previously issued to other individuals, predominantly children.

According to the trial evidence, one of the primary purposes of the fraud scheme was to obtain bank loans, private loans, auto loans, and lines of credit using the stolen social security numbers, counterfeit social security cards, and personal identity information (“PII”) of actual persons to create a false (improved) credit score.

The trial evidence also established that Bland obtained and sold the misappropriated social security numbers to Michael Westbrook and at least 20 others located throughout the country, whom Bland called his “affiliates.” These “affiliates” in turn sold those numbers to buyers. For an additional fee, Bland would provide fraudulent social security cards bearing the stolen number and the name of the “buyer.” Bland also provided fraudulent driver’s licenses to the “customers.” These items were provided so that “customers” could defraud banks and other lenders by drawing upon lines of credit using the stolen social security numbers.

According to the trial evidence, Bland compromised the social security numbers of at least 1,500 people during the conspiracy. The majority of the stolen social security numbers belonged to children all over the United States.

A co-conspirator, Michael Westbrook, also pled guilty to conspiracy to commit wire fraud and aggravated identity theft. He is awaiting sentencing.

Bland faces a maximum sentence of 20 years in prison on each of the wire fraud counts and a maximum of 10 years in prison on each of the social security fraud counts. Senior U.S. District Judge J. Frederick Motz has scheduled sentencing for July 14, 2017 at 10:00 am.

The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

United States Attorney Rod J. Rosenstein commended HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Lauren Perry and Aaron Zelinsky, who are prosecuting the case.

Michael Gerard Camphor, 60, Baltimore, Maryland, was sentenced to 27 months in prison, followed by three years of supervised release on charges arising from the fraudulent purchase of four properties in Baltimore, Maryland, using fraudulent loan documentation and straw purchasers, resulting in losses of over $735,000. Camphor was also ordered to pay restitution of $735,363.47 and to forfeit $962,274.95.

According to Camphor’s plea agreement and other court documents, since 2002, co-conspirator Andreas E. Tamaris, 46, Bel Air, Maryland, purchased, renovated, and then resold distressed row houses in Baltimore City, Maryland, primarily in the Highlandtown neighborhood. Camphor had worked as a real estate agent for a company and also operated a real estate consulting business called Ron Gerard LLC, a/k/a Ron Gerard & Associates.

From approximately February 2008 to July 2009, Camphor and his co-conspirators, including Cecil Sylvester Chester, 70, Mitchellville, Maryland, found buyers for Tamaris’ properties and for other property owners. They sought potential buyers who were inexperienced with residential real estate transactions to act as straw purchasers. Camphor and his co-conspirators advised these “straw purchasers,” who lacked the funds needed to pay the down payment and closing costs, that they didn’t need to contribute these funds to buy the properties. Because the straw purchasers also lacked the earnings to keep up the mortgage payments, the conspirators typically promised that they would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed. The conspirators promised to collect the rent and make the mortgage payments.

The government contended at sentencing that Camphor and his co-conspirators set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit. The conspirators provided false information about the straw purchasers’ employment, income and financial assets to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.

One of the conspirators brought the straw purchaser to the closing and then caused the straw purchaser to falsely sign certifications in the closing documents affirming that the property was to be used as the primary residence, and that no portion of the down payment and closing costs were borrowed. Following the settlement on each transaction in which they participated, Camphor and his co-conspirators received substantial payments drawn from the proceeds of the loan. Few, if any, payments were made towards the mortgages.

Camphor was integrally involved in the fraud scheme by which four of the properties handled by the conspirators were sold and financed: 126 S. Curley Street, Baltimore, Maryland; 1720 W. Pratt Street, Baltimore, Maryland; 322 S. Robinson Street, Baltimore, Maryland; and 8020 Gough Street, Baltimore, Maryland. All four properties went into foreclosure, resulting in a loss of at least $735,000.

Camphor has agreed to forfeit property retained or obtained as a result of the fraudulent conspiracy, including 1619 W. Baltimore Street, Baltimore, Maryland; 2040 Linden Avenue, Unit A, Baltimore, Maryland; and 1610 N. Smallwood Street, Baltimore, Maryland.

Chester previously pleaded guilty to the same charges and was sentenced to two years in prison and was ordered to pay restitution of at least $1.483 million.

In related proceedings, Tamaris, Christopher A. Kwegan, 59, Randallstown, Maryland, and Alexander Sivels, II, 32, Baltimore, Maryland, previously pleaded guilty to their roles in this, or related mortgage fraud schemes. Tamaris was sentenced to 15 months in prison and was ordered to pay $1,229,206.28 in restitution. Sivels and Kwegan were each sentenced to 27 months in prison. Judge Bredar ordered Sivels to pay restitution of $1,317,314.35, and ordered Kwegan to pay restitution of $530,641.27.

U.S. District Judge James K. Bredar sentenced Camphor. The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service – Baltimore Field Office.

United States Attorney Rod J. Rosenstein commended the FBI, HUD OIG – Office of Investigations and the U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the case.

Cecil Sylvester Chester, 70, Mitchellville, Maryland was sentenced to two years in prison, followed by three years of supervised release, for a mortgage fraud scheme involving the fraudulent purchase of seven properties in Baltimore, Maryland using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.4 million.

Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland.  Co-conspirator Andreas E. Tamaris, 46, Bel Air, Maryland,   purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in the Highlandtown area. Co-conspirators Michael Gerard Camphor, 60, Baltimore, Maryland, was a real estate agent and Christopher A. Kwegan, 59, Randallstown, Maryland,was a real estate agent and general contractor.

According to his guilty plea, from February 2008 to July 2009, Chester and his co-conspirators, found buyers for Tamaris’ properties and for other property owners. Chester persuaded individuals, who were inexperienced with residential real estate transactions and who lacked the funds needed to pay the down payment and closing costs, to purchase Baltimore row houses owned by Tamaris or otherwise located by the conspirators. Chester advised these “straw purchasers” that they didn’t need to contribute funds for the down payment or closing costs to buy these properties. Chester also advised that he would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed, and that Chester would collect the rent and make the mortgage payments.

Chester and his co-conspirators set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit.  For example, when Kwegan located a house he wanted to sell, he sought assistance from Chester and real estate agent/consultant Camphor, who were already operating a mortgage fraud scheme. Chester, Kwegan and Camphor set the price of a row house in Baltimore at $250,000, rather than the actual market price of approximately $75,000. Kwegan derived over $100,000 in proceeds from the sale of this home to a straw purchaser and paid another $40,000 to Chester for his assistance.

Chester, Camphor, and others recruited buyers to purchase houses, knowing that they did not qualify for the home mortgages.  The conspirators provided false information about the straw purchasers’ employment, income and financial assets, as well as fraudulent supporting documentation to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.

Chester brought the straw purchasers to the closing, and then caused the straw purchasers to falsely sign certifications in the closing documents affirming that they intended to use the properties as their primary residence and that no portion of the down payment and closing costs were borrowed.  Following the settlement on each transaction in which they participated, Chester and the other conspirators received substantial payments drawn from the proceeds of the loan.

Few, if any, payments were made towards the mortgages.  The seven properties in which Chester was involved all went into foreclosure, resulting in a loss of at least $1.483 million.

Chester was sentenced by U.S. District Judge James K. Bredar. Judge Bredar also ordered Chester to pay restitution of at least $1.483 million, with the exact amount to be determined by the Court.

In related proceedings, Tamaris, Camphor, Kwegan, and Alexander Sivels, II, 32, Baltimore, Maryland, previously pleaded guilty to their roles in this, or related mortgage fraud schemes.  Tamaris was sentenced to 15 months in prison and was ordered to pay $1,229,206.28 in restitution.  Sivels and Kwegan were each sentenced to 27 months in prison.  Judge Bredar ordered Sivels to pay restitution of $1,317,314.35, and ordered Kwegan to pay restitution of $530,641.27. Camphor is scheduled to be sentenced on December 19, 2016.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation; Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service – Baltimore Field Office.

United States Attorney Rod J. Rosenstein commended the FBI, HUD OIG – Office of Investigations and the U.S. Secret Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.

Alexander Sivels, II, real estate consultant, 32, Baltimore, Maryland and Christopher A. Kwegan, real estate agent, 59, Randallstown, Maryland, were each sentenced to 27 months in prison, followed by three years of supervised release, for related mortgage fraud schemes. U.S. District Judge James K. Bredar handed down the sentence and also  ordered Sivels to pay restitution of $1,317,314.35, and ordered Kwegan to pay restitution of $530,641.27.

Sivels previously pleaded guilty to wire fraud involving the fraudulent purchase of at least nine properties in Baltimore using fraudulent loan documentation and settlement documents, resulting in actual or attempted losses of more than $1.3 million. Kwegan participated in the fraudulent sale of two properties with losses of more than $530,000.

According to Sivels’ plea agreement and other court documents, Sivels owned Royal Real Estate Consultants LLC, and co-conspirator Cecil Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland.  Co-conspirator Andreas Tamaris, 46, Bel Air, Maryland, purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in Highlandtown.  In 2007 or 2008, Sivels met Tamaris and agreed to assist Tamaris to find purchasers for houses he had bought and renovated, or that were owned by developers who owed money to Tamaris for renovation work.  Tamaris told Sivels the amount he needed to receive from the sale of each property to recover his investment and earn a profit.  Tamaris told Sivels that he could keep any excess funds generated if Sivels sold the house for more than the amount Tamaris needed to cover his costs.

Between 2008 and 2011, Sivels participated in the sale of at least nine properties, all of which were eventually foreclosed upon, resulting in losses of more than $1.3 million.  In 2008 and 2009, Sivels and Chester recruited buyers to purchase houses, knowing that they did not qualify for the home mortgages.  To enable the buyers to purchase the properties, Sivels and his co-conspirators prepared fraudulent mortgage applications which misrepresented the buyers’ income and assets.  Sivels sometimes created fake tax documents and false pay stubs, and falsified bank statements to reflect the substantial balances referenced by the loan application.  The conspirators often inflated the price of the house to insure a profit for themselves.  At the settlements for the properties, the proceeds of the sale were generally distributed to Tamaris, who would write checks to Sivels for his portion of the profits.  From the sale of just four of the properties Sivels received payments totaling more than $200,000.

In 2010 and 2011, Sivels assisted with the sales of several other Tamaris-owned properties by providing prospective lenders with fraudulent verifications of employment for the purchasers, falsely representing that they worked at a home renovation company Sivels owned, receiving cash payments in return for his assistance.

According to his guilty plea, in the summer of 2008, Kwegan learned that the owner of a row house on Washington Boulevard in Baltimore City was trying to sell his home.  The owner had purchased the property 10 years earlier for $11,500 and Kwegan told him that he could sell it for $75,000.  The owner agreed to sell it for that price. Rather than trying to sell the property at the actual market price, Kwegan requested assistance from Cecil Chester, who was already operating a mortgage fraud scheme and they set the sale price of the row house at $250,000.

Kwegan arranged to use the personal identifiers of an individual recruited by Chester to buy the property as a straw purchaser.  Kwegan and his co-conspirators knew that the straw purchaser lacked the necessary assets to pay for the down payments and closing costs on the property, or the income to keep up the mortgage payments on the house after the transaction closed.  Chester provided a mortgage loan broker with a false loan application and fraudulent supporting documents which inaccurately represented that the straw purchaser’s employment, annual income, and assets.  Based upon these false representations, a bank wired $242,500 to finance the purchase of the property, at the settlement on September 30, 2008.  Kwegan used his own funds to obtain a cashier’s check in the amount of $9,391.53 to cover the down payment and the straw purchaser’s share of the closing costs.  After the settlement, just $15,773.65 was disbursed to the seller of the property.  In contrast, $145,000 was wired to an entity identified as “CAK,” which were Kwegan’s initials.   These funds were transferred into Kwegan’s bank account.  Kwegan then wrote a check to Chester for $35,000.  No payments were made on the mortgage.  The property went into foreclosure and remains unsold at this time, resulting in a loss of between $150,000 and $235,000.  At today’s hearing, the Court found that Kwegan was also involved in the fraudulent sale of another property with Chester, resulting in a loss of $296,000.  Kwegan derived over $100,000 in proceeds from this transaction and paid another $40,000 to Chester for his assistance.

Tamaris previously pleaded guilty to one count of conspiracy to commit mail and wire fraud and is scheduled to be sentenced on November 15, 2016.  Co-conspirator Cecil Sylvester Chester, age 69, of Mitchellville, Maryland pleaded guilty to the fraudulent purchase of seven properties in Baltimore, using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.4 million. Chester is scheduled to be sentenced on November 28, 2016. Michael Gerard Camphor, 60, Baltimore, Maryland, previously pleaded guilty for his participation in the fraudulent purchase of four properties in Baltimore resulting in losses of over $736,000. Judge Bredar scheduled Camphor’s sentencing for December 19, 2016.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation; Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service – Baltimore Field Office.

Mortgage fraud perpetrators steal by inducing lenders to make loans that will never be repaid, and they harm neighborhoods when the inevitable foreclosures drive down property values,” stated U.S. Attorney Rod J. Rosenstein.

United States Attorney Rod J. Rosenstein commended the FBI, HUD OIG – Office of Investigations and the U.S. Secret Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the cases.